November 16, 2006
Unintended consequences #83
Congress, for one reason or another, but probably mostly for the rhetorical value, doesn't like online gambling. Fair enough. That notwithstanding, it has refused to ban it. This isn't immediately intuitive, but remember, it is Congress we're talking about, so *ahem* all bets are off.
Enter... Antigua? Yeah, Antigua. Infamous tax-shelter, data haven, etc. Antigua regulated and promoted internet gambling based on its island almost as soon as the idea was born. Fair enough. Problem is, Congress doesn't really like that kind of thing, and has attempted to prohibit credit card companies from processing payments for interstate and international gambling sites. Ooookay.
Response? Antigua files a complaint with the WTO, arguing that as the US does not ban online gambling, under its pre-existing free-trade agreements it cannot restrict foreign access to the online gambling market. The WTO, logically enough, agrees, and orders the US to either ban online gambling completely or stop messing with people. Fair enough.
The US does nothing for the year it was given to fix the problem, and then announces that there is no problem, and that we've been in compliance the whole time. Uh-huh.
Solution? Antigua files another WTO complaint, this time asserting that if the US refuses to honor its free-trade commitments with Antigua, Antigua is under no obligation to honor its free-trade commitments with the US. But as Antigua is almost exclusively an import market, and as the US is its biggest trade partner, retaliatory tariffs aren't exactly a good idea.
What's a tiny, Caribbean island nation to do? Why ignore intellectual property laws, of course! If the US doesn't fix its gambling problem, Antigua is likely to become a bonanza of legally redistributed copyrighted material.
Weird.
What a fascinating article. I'm pulling for Antigua on this one.
Posted by: Josiah at November 16, 2006 1:08 PM